NCAA college football players: Students or employees?

Published 17 April 2014 | Authored by: Paul J. Greene

In this article, Paul Greene examines the ramifications of the Chicago office of the National Labor Relations Board’s recent finding that football scholars attending Northwestern University are employees of the University for the purposes of the National Labor Relations Act, and in particular the potential consequences for the National Collegiate Athletic Association.

Players receiving scholarships to perform football-related services for the Employer [Northwestern University] under a contract for hire in return for compensation are subject to the Employer’s [Northwestern University’s] control and are therefore employees within the meaning of the [National Labor Relations] Act.1

With those words, the principle and ethos of amateurism, upon which the National Collegiate Athletic Association (“NCAA”) was founded, was shaken. College student-athletes have been declared “employees” of a university for the first time, making the scholarship football players at Northwestern University in Evanston, Illinois, just north of Chicago, eligible to collectively bargain with the school for salaries and other employment benefits.

The decision issued by the Chicago office of the National Labor Relations Board (NLRB), a federal agency that oversees private labor relations in the U.S., is already under review by the national NLRB office (and will no doubt be appealed). It could take many years before the matter is resolved. However, the decision could potentially trigger a seismic shift in elite college sports in the U.S. Until now, scholarship athletes have been considered students enrolled in a college, not employees of the college. The NCAA’s self-stated core purpose is “to govern competition in a fair, safe, equitable and sportsmanlike manner, and to integrate intercollegiate athletics into higher education so that the educational experience of the student-athlete is paramount.”2

The NLRB Chicago Regional Director, Peter Sung Ohr, turned the NCAA mission statement on its head by finding that football players receiving scholarships to perform football-related services for Northwestern University are sufficiently subject to the school’s control that they are considered employees under federal law.3

While it is true that the players do not receive a ‘paycheck’ in the traditional sense,” Ohr reasoned, “they nevertheless receive a substantial economic benefit for playing football.” A Northwestern football player, Ohr explained, receives a scholarship valued at as much as $76,000 per year and a total compensation package that totals more than a quarter of a million dollars for “performing football duties” for Northwestern over the course of their collegiate career.4

Ohr considered the following factors in reaching his determination5:

  1. The Northwestern scholarship football players are required to sign a “tender” to formally accept an offer of a full scholarship.6 Ohr regarded the tender as an “employment contract” extended by the university to the player solely in consideration for the athletic services to be performed.7
  2. Scholarship football players at Northwestern are subject to the almost complete control of the university as a condition of “payment” by scholarship.8 Players are required to devote 50-60 hours per week to football related activities during pre-season training over the summer.9 During the season, players devote 40-50 hours per week to football related activities, almost entirely under the control of the university.10 Northwestern controls where a football player can: (a) live; (b) work for an “outside employer”; (c) drive a car, (d) travel off campus, (e) communicate on the Internet; (f) interact with the media; (g) use alcohol and drugs, and (h) engage in gambling.11 This, Ohr noted, highlighted “how pervasively the players’ lives are controlled when they accept a football scholarship.”12
  3. Compensation” for the Northwestern scholarship football players is tied solely to athletic performance, with no regard for academic performance. Scholarships, Ohr noted, can be immediately cancelled if a player voluntarily withdraws from the football team. For this reason, Ohr determined that the reasoning articulated in a 2004 NLRB decision, which decided that Brown University’s graduate students were not “employees” was not applicable.13 Ohr found that the Northwestern scholarship football players were not akin to the Brown graduate students, since the financial support received by the Brown graduate students was primarily tied to their academic performance, which made them “primarily students.14 Instead, he found that the Northwestern scholarship football players were not ‘primarily’ students since the amount of time they devoted to football alone (and not academic studies) was more than many full-time employees devote to their jobs.15
  4. The Northwestern scholarship football players are not “temporary employees” but rather employees with a defined period of employment for the university (four years or five years in the case of a “redshirt” player) during which they work in excess of full-time employment hours (more than 40 per week) and virtually year round.16

For these reasons, Ohr concluded that all Northwestern scholarship football players were “employees” under the National Labor Relations Act eligible to collectively bargain with Northwestern University immediately.17 Ohr ordered an election by the current Northwestern scholarship football players to determine whether or not they want to be represented by the union calling itself the College Athletes Players Association for collective bargaining purposes.18 Northwestern players will vote April 25 on whether to recognize the union.19

 

What will be the ultimate impact of the Northwestern football decision?

Perhaps surprisingly only 17 elite college football schools (FBS Division I schools) are private, or less than 14 percent of the total number of schools that compete in FBS Division I football.20 Since the NLRB only oversees private employers, the vast majority of the FBS Division I schools (which are public universities) will not be affected by the decision, at least in a literal sense, since those schools do not fall under the auspices of the NLRB. Thus, it is at least conceivable that some NCAA Division I student-athletes will be considered “employees” moving forward while others will not. If that transpires to be the case, the NCAA would become a ‘patchwork’ lacking uniformity.

More likely, the decision will force the NCAA to revisit the way it distributes revenue to its “student-athletes.” Northwestern University reported to the U.S. Department of Education that its football team generated total revenues of $235 million against $159 million in expenses between 2003 and 2012 (or $76 million in profit).21 For the 2012-13 year, Northwestern’s football program generated roughly $8 million in profit.22 Accordingly, the decision supports the long held view in the U.S. that student-athletes who generate millions of dollars a year in revenue for a university should be paid, and that their contributions to their university’s bottom line should be recognized.

Could the NCAA survive if universities like Northwestern are forced to collectively bargain with unions advocating on behalf of individual teams and pay salaries to players? NCAA President Mark Emmert does not think so. He has stated in the aftermath of the Northwestern decision that the NCAA cannot survive unionization. In Emmert’s words, “the notion of using a union employee model to address the challenges that do exist in intercollegiate athletics is something that strikes most people as a grossly inappropriate solution to the problems . . . .[i]t would blow up everything about the collegiate model of athletics.23

The future of college sports in the U.S. is therefore more uncertain than ever. It is seems that the only guarantee is that the NCAA, and the role of student-athletes, will be redefined, perhaps dramatically, in the months and years ahead. The development of elite NCAA sports is an evolving narrative. The next chapter will be fascinating to observe.

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About the Author

Paul J. Greene

Paul J. Greene

pgreene@globalsportsadvocates.com | @greenesportslaw

Paul J. Greene, Esq. is a U.S. based sports lawyer who protects the rights of athletes in disputes, including those charged in anti-doping proceedings. Paul has been recognized by Chambers USA and Super Lawyers as one of America’s top sports lawyers.

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